Evolution instead of revolution. Why have Poland’s PRS and PBSA sectors abandoned the sprint in favour of a marathon?

Poland’s residential market is undergoing a profound structural transformation. Just a few years ago, institutional rental housing (PRS) and private student accommodation (PBSA) were expected to rapidly dominate the landscape of Poland’s largest metropolitan areas, while foreign funds would build at a race pace. At the beginning of 2026, however, it is clear that both sectors are developing differently than assumed. Instead of a sudden boom, we are observing stable, long-term growth based on carefully calculated investments and the gradual professionalization of the market.

PRS approaches the 30k apartment milestone

According to the latest CBRE data, at the end of the first quarter of 2026 the stock of apartments operating in the PRS model in Poland reached 29 900 units. This represents a tenfold increase compared with 2018. Just a few years ago, the PRS market in Poland was a marginal segment; today it has become a permanent part of the investment landscape in the largest cities. The year 2025 alone was record-breaking in terms of new supply: nearly 6 000 apartments across 26 projects were delivered, and in the first three months of 2026 the market expanded by a further 1 300 units. Moreover, approx. 4 200 apartments are planned for completion by the end of 2026, while projects at the preparation stage comprise 18 000 units.

CHART 1: PRS STOCK (2013-2027)

source: “Living: primary market in Warsaw and PRS in Poland, Q1 2026”, CBRE

Despite this strong momentum, the PRS sector remains small in relation to the overall residential market. According to Statistics Poland (GUS), Poland’s total housing stock exceeds 16 million units, while the private rental market is estimated at approx. 1.9 million apartments. This means that apartments owned by institutional funds account for only a fraction of a percent of the national stock (0.2%) and less than 2% of all rental apartments. Even in Warsaw, which remains the undisputed leader in institutional investment, the share of PRS in the market structure fluctuates around only 1%. The dominance of the individual sector is illustrated by the fact that the number of taxpayers declaring income from private rental exceeded 1.1 million in 2024 (up by 5.6% year on year).

The current scale of the PRS sector does not confirm concerns about a significant impact of funds on the ownership structure of apartments or on price levels across the market as a whole. Institutional rental is not a competitor to the dominant private rental market, but rather its professional complement. Most rental apartments remain in the hands of individual owners (as much as 98% of the market), while PRS operators focus on offering a standardized product, professional management and greater predictability for tenants.

Market leaders and major transactions

Poland’s PRS sector remains the domain of institutional capital, primarily foreign capital. At the beginning of 2026, the largest commercial operator was still the Resi4Rent platform, with a portfolio of approx. 6 800 apartments. The next positions were held by Vantage Rent (3,7k units) and LifeSpot (2.5k units). Polish capital, in turn, is represented mainly by the state-owned PFRN: taking into account the combined stock of the two managed funds (FMnW and FMdR), this entity is the largest institutional investor in the country, with a portfolio exceeding 7.2k units.

The market has just seen a historic reshuffle in the leader position. According to the official press release issued by Griffin Capital Partners in May 2026, the major transaction between Resi4Rent and the TAG Group (owner of Vantage Development) entered the finalization phase. This record transaction, worth approx. PLN 2.4 billion and covering 18 special-purpose companies with a pool of more than 5.3k units, ultimately changes the balance of power in Poland’s PRS sector after months of waiting for regulatory decisions.

It is worth noting that the total transaction volume in the living sector[1] in 2025 closed at EUR 629 million (representing a spectacular increase of 301% year on year). However, the structure of the investment market shows that activity in fact remains relatively limited. The vast majority of the transaction volume in the living sector in 2025 was generated by this single R4R-TAG transaction. This means that investors continue to approach new projects selectively, preferring forward-funding and forward-purchase investments.

Rental geography and the new rent reality

Although the rental sector is growing rapidly, its stock is still clearly concentrated within the largest metropolitan areas, with particular emphasis on Warsaw, Wroclaw and Cracow. The capital remains the clear leader, accounting for more than one-third of all institutional apartments in Poland. The table below clearly illustrates the distance separating Warsaw from regional markets.

TABLE 1: PRS STOCK BY CITY

source: “Living: primary market in Warsaw and PRS in Poland, Q1 2026”, CBRE

A fairly uniform PRS product model has already developed in the largest cities. Apartments of around 40 sqm dominate, and the most popular unit type is the one-bedroom apartment (a separate bedroom and a living room with kitchenette), accounting for approx. 50% of the offer. Studios are in second place, accounting for approx. 40%. The average project comprises approx. 200 apartments, which enables economies of scale in building management and maintenance.

After the period of sharp increases observed in 2022-2024, the market has entered a phase of rent stabilization. In PRS projects, rates are generally higher than in private rental, but the difference results from location, finish standard, available services and professional management.

In the largest cities, rents in institutional projects currently range from approx. PLN 70/sqm in Lodz to more than PLN 100/sqm in Warsaw. In practice, this means that the monthly rent for a studio apartment most often ranges from PLN 2 500 to more than PLN 4 000, while one-bedroom units usually reach between PLN 3 000 and PLN 5 000 per month, depending on the location and standard of the project. Other major regional markets, such as Cracow, Wroclaw, Poznan and the Tri-City, remain stable in the range between Lodz and Warsaw levels.

The growing supply of apartments has also made the market more competitive. In some cities, the pace of rent growth has slowed markedly and selected locations have even recorded small rate corrections.

PBSA – boom in modern student accommodation

Alongside the residential rental market, the private student accommodation sector (PBSA) is developing extremely dynamically. For years this segment was treated as a market curiosity; today it is a fully fledged and one of the most sought-after targets for international capital. A strong example of this is the enormous financing secured at the end of 2025, when Student Depot obtained as much as PLN 770 million from a consortium of PKO BP and ING for portfolio refinancing and the construction of new facilities. CBRE and Savills data show the vast scale of planned investments.

TABLE 1: PBSA SECTOR STOCK

source: own analysis based on CBRE and Savills data

The drivers of private student accommodation remain demographic and structural factors, above all the enormous supply gap. Public student halls have struggled with underfunding for years, offering an outdated standard, while their number is drastically insufficient relative to the hundreds of thousands of students in the largest academic centres. Another strong driver is the inflow of international students, for whom a higher standard of accommodation in a single room is an absolute basic expectation. Today’s generation of students is redefining convenience, focusing on flexibility, access to modern technologies and the ability to build community through extensive common areas. The all-inclusive fee model, covering utilities and high-speed Internet in a single monthly charge, also remains an important advantage.

What Is Holding Investors Back from Sprinting? Key Barriers to Market Development

Since demand for professional rental remains high and the living sector attracts the attention of international capital, a natural question arises: why is the market not developing even faster? The answer lies in a series of structural barriers that mean investors increasingly choose a strategy of gradual growth rather than aggressive expansion.

1. High land prices and competition from the for-sale market

The most important obstacle remains access to attractive investment land. In the largest Polish cities, prices of development plots have risen in recent years to levels that are often difficult to economically justify from the perspective of rental projects.

PRS funds build a business model based on generating rental income over many years. This means that every investment must meet rigorous profitability criteria. Meanwhile, developers carrying out traditional build-to-sell residential projects for individual clients are often willing to pay more for land because they recover the invested capital much faster.

The share of land costs in the final apartment price in the largest agglomerations has already approached 20-25%, which significantly limits the negotiating room of PRS funds. Large-scale bulk purchases are difficult when the retail market is breaking records: in Warsaw alone, more than 4 200 apartments were sold individually in Q1 2026, and the average asking price reached a record level of approx. PLN 19 000/sqm. Such an absorptive and expensive retail market effectively hinders funds from negotiating satisfactory rates.

2. Limited number of projects matching funds’ requirements

The second challenge is the shortage of ready products and consolidated apartment portfolios. Most funds prefer to purchase large packages covering entire buildings or estates, which allow them to manage assets efficiently and reduce operating costs. Meanwhile, the supply of such projects from developers in Poland is very limited.

Poland’s residential market was built primarily with retail sales in mind. As a result, many projects already have a fragmented ownership structure at the implementation stage, which makes their subsequent use in the PRS model more difficult.

This situation means that investors are increasingly becoming involved in forward projects, financing developments while they are still under construction. This makes it possible to secure housing supply, but at the same time increases investment risk and extends the waiting period before target revenues are achieved.

3. Lower profitability than in the classic development model

Although the PRS sector is perceived as promising, its profitability does not always exceed that of traditional residential projects intended for sale.

During periods of strong apartment price growth, developers can achieve higher margins by selling units to individual buyers. For many companies, cooperation with a fund therefore means giving up part of the potential profit in exchange for greater predictability and transaction security.

The market has already seen cases of some investors changing their strategy. Some apartments originally intended for rental were redirected to the for-sale market when financial analysis indicated more favourable conditions for such a solution. This shows that PRS still competes for capital with the traditional development market and does not function entirely independently of it.

4. Regulatory and tax uncertainty

One of the risk factors most frequently highlighted by investors remains the regulatory environment. Institutional capital prefers stability and predictability, while in recent years Poland’s residential market has operated under conditions of frequent legislative changes.

Doubts concern, among other things, VAT settlements, interpretations of provisions related to institutional rental and the rules for real estate taxation. Investors also point to the absence of a long-term state housing policy that would make it possible to anticipate the direction of regulatory changes over a horizon of more than a dozen years.

The reform of the spatial planning system remains an additional challenge. Delays in the adoption of general plans by municipalities may lead to longer administrative procedures and, in some locations, limit the possibility of launching new projects.

Another source of uncertainty is the public debate around proposals to tax vacant units, introduce a cadastral tax or change the rules governing collective residence buildings.

5. Rising costs of completing projects

Investor decisions are also affected by rising construction costs. In addition to higher prices of materials and contractor services, new technical and environmental requirements imposed on residential buildings are important.

Growing expectations regarding energy efficiency, accessibility for people with disabilities and ESG standards increase investment outlays, while at the same time becoming a necessary element of modern projects. For the largest funds, this is not an insurmountable barrier, but it affects profitability and lengthens the payback period.

What’s next for the living sector?

Despite these limitations, investors are not withdrawing from the market. On the contrary, most sector participants agree that fundamental demand drivers remain exceptionally strong, which allows the market outlook to be viewed with moderate optimism.

The future of the PRS and PBSA sectors in Poland is now determined primarily by demand-side factors. The market paradox is that most barriers limiting the development of new supply occur in parallel with persistently very strong demand for rental.

Rising apartment prices, the high cost of financing real estate purchases and limited access to mortgage loans mean that, for an increasing group of households, owning a home is becoming a goal postponed over time. At the same time, growing occupational mobility and changing lifestyles mean that rental is ceasing to be a temporary solution and is increasingly becoming a conscious choice for many years.

This is particularly visible among younger generations. For many people, buying their own apartment around the age of 30 has ceased to be a natural life stage and has become a challenge requiring a high down payment and appropriate creditworthiness. As a result, the group of people referred to as “renters by necessity” is growing; they expect from the market not only access to a unit, but also stability, predictability and professional service. Transparent rental terms, a high standard of apartments and security, which the fragmented private rental market does not always provide, are gaining increasing importance.

These are exactly the needs that the PRS sector is designed to address, offering a product closer to the standards that have operated for years in mature Western European markets. The PBSA sector, in turn, benefits from similar demographic trends and students’ growing expectations regarding accommodation quality.

Both PRS and PBSA have now entered a maturation phase. Investors are increasingly less focused on rapid growth at any cost and more often on operational efficiency, asset quality and long-term profitability. The growing mobility of society, the concentration of the population in the largest agglomerations and limited access to home ownership will continue to support the development of the living market.

Everything indicates that the coming years will bring further growth in both segments, although it will be gradual, more predictable and based on solid economic foundations to a greater extent than assumed just a few years ago. The year 2026 can therefore be regarded as the moment of transition from a phase of dynamic expectations to a stage of mature development. Poland’s living market has not abandoned its growth ambitions – it has simply traded a sprint for a marathon.

Agnieszka Pilcicka
Senior Real Estate Market Analyst

[1] The living sector is a commercial real estate segment dedicated to meeting residential and living needs. It is focused on institutional rental and professionally managed assets, providing investors with stable, long-term revenue streams.